Participatory Notes, also called P-Notes or just PNs are instruments that are issued by registered FIIs to overseas investors who want to invest in the stock markets in India, without registering themselves with the market regulatory authority SEBI. PNs are not used within India but by investors abroad. Hence, they are also known as offshore derivative instruments. They are used by clients of FIIs who do not wish to directly participate in the stock market in India, but do it through the FIIs using PNs. They used to be very popular and in 2007, the percentage of PNs in FIIs were almost 50%. So, SEBI put in norms curbing PNs. FII registration itself was streamlined. The idea behind the move was that there was no possibility of knowing the owners of the underlying securities acting via PNs.